| February 29, 2024 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | |
Futures Discovery: Physical Delivery VS Cash Settlement
JohnLothianNews.com
Today, we're delving into the fundamental aspect of futures trading-the Settlement Showdown: Physical Delivery versus Cash Settlement. In the dynamic world of futures trading, how contracts are settled is a game-changer, influencing strategies and risks alike. Join me as we explore the two primary methods that define this landscape: Physical Delivery and Cash Settlement.
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Term of the Week - To Be Paid By the Buyer to the Seller
JohnLothianNews.com
In addition to their potential intrinsic value, options also have another element of value: the option premium. The premium has to be paid by the buyer, which is then transferred to the option seller. To a certain extent, the purchase of an option contract can be compared to the acquisition of an insurance policy, where a premium is charged by the insurance seller. The insurance buyer pays the premium in advance of the period during which the insurance agreement is valid. The contract embeds a potential claim, which will only be lifted if certain conditions are met.
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| | | | | | Lead Stories | | | US Hedge Fund Profits After Doubling Bet on European Gas Options; Statar doubled its EUR350 million investment in gas options
Priscila Azevedo Rocha - Bloomberg
A US hedge fund specializing in natural gas profited from an unusually large bet that volatility would ease in Europe, showing the growth of the options market after banks and hedge funds piled in following Russia's invasion of Ukraine.
Miami-based Statar Capital LLC doubled its EUR350 million investment buying EUR50 put options in early November, according to a people familiar with the situation who asked not to be named because the matter is private. The fund closed the position throughout February in line with declining prices in the region that have also led to lower volatility. The profit has led traders to call it 'the trade of the year'.
/jlne.ws/3P3vt3B
Grayscale lobbies SEC to approve options on spot bitcoin ETFs
Hannah Lang - Reuters
Crypto asset manager Grayscale Investments is urging the U.S. securities regulator to greenlight options on its spot bitcoin exchange-traded fund, a move that would open the product to a new class of investors.
In a letter sent Wednesday to the Securities and Exchange Commission, Grayscale CEO Michael Sonnenshein said an SEC rejection of options on its Grayscale Bitcoin Trust (GBTC.P), opens new tab would "unfairly discriminate" against its shareholders, noting that the regulator has previously approved options on ETFs tied to bitcoin futures.
/jlne.ws/3IgJh7l
BlackRock's bitcoin ETF draws $520 million in a day as latest rally pumps up investor enthusiasm
Yuheng Zhan - Business Insider
Bitcoin's latest rally toward all-time highs fueled the second-largest daily inflow into a US exchange-traded fund this week.
BlackRock's iShares Bitcoin Trust (IBIT) absorbed $520 million in a single day on Tuesday, marking not only the largest daily influx among ETFs tracking the world's top cryptocurrency but also the second-largest daily cash infusion for a US ETF, according to data compiled by Bloomberg.
/jlne.ws/4bZapVK
Banks Are Back Into Credit Derivatives. Stay Calm; Financial institutions are buying insurance to hedge lending risk, but it's far from signaling that a 2008 redux is in the works.
Paul J. Davies - Bloomberg
Barclays Plc struck a $1.1 billion deal with Blackstone Inc. this week to offload risks in its US credit-card business while still managing the accounts of its own customers. This obscure-sounding trade touches only a small part of its $32 billion US card book business, let alone the bank as a whole. But it is part of a growing trend of risk-transfer deals mainly by European banks to shore up their balance sheets and capital ratios.
/jlne.ws/3uV3fBl
Bitcoin ETFs Shake Up Crypto Market After Storming Wall Street; New US funds contribute to Bitcoin's surge toward a record
Sidhartha Shukla - Bloomberg
New US spot Bitcoin exchange-traded funds are shaking up the market for the original cryptocurrency after widening demand for the token and attracting more than $7 billion of net inflows in less than two months.
/jlne.ws/3uRCT36
Crypto Hedge Fund Tied to FTX Restarts Under New Name; LedgerPrime was forced to wind down as part of FTX bankruptcy
Muyao Shen - Bloomberg
LedgerPrime, a digital-asset hedge fund that was a part of the collapsed FTX empire, is back under a new name.
Now MNNC Group, the Cayman Islands-registered, multi-strategy hedge fund has raised an undisclosed amount of money from backers, including those who invested in LedgerPrime, a subsidiary of Ledger Holdings, which was acquired by FTX US in 2021.
/jlne.ws/4bWduWz
Man Group profits drop 60% after weak returns from quant strategies; Core performance fees down by more than three-quarters to $180mn
Costas Mourselas - Financial Times
Profits at the world's largest listed hedge fund Man Group more than halved last year as lacklustre returns from its computer-driven quant strategies hit fee income. Pre-tax profits fell from $745mn to $279mn in 2023, after core performance fees - which clients pay to Man Group when investment strategies deliver positive returns - dropped by more than three-quarters to $180mn.
/jlne.ws/3wAKDXU
| | | | | | Exchanges | | | Re-Introduction Of An Option Class
Bourse de Montreal
Bourse de Montreal Inc. (the Bourse) and Canadian Derivatives Clearing Corporation (CDCC) hereby inform you that at the opening of trading on Thursday February 29, 2024, the following
new option class will be re-listed: Dream Office Real Estate Investment Trust (D.UN)
/jlne.ws/3uIUqL1
The Moscow Exchange is expanding its line of futures and premium options on shares
MOEX
On March 5, 2024, trading in deliverable futures contracts and premium options on Sovcombank shares will begin on the Moscow Exchange derivatives market. The Moscow Exchange is progressively developing a line of derivatives instruments on the derivatives market in order to expand investment opportunities for all categories of clients. Stock futures and premium options allow you to implement a variety of trading strategies, including active trading or hedging equity portfolios.
/jlne.ws/3P2UX11
New Product Summary: Initial Listing of the Options on Urea (Granular) FOB US Gulf Futures Contract - Effective March 25, 2024
CME Group
Initial Listing of the Options on Urea (Granular) FOB US Gulf Futures Contract
/jlne.ws/48I96be
| | | | | | Strategy | | | Three Trade Ideas FEB 29th
Tastylive (Video)
In this video, the hosts of Option Trading Concepts Live discuss various topics including their earnings trades, and market updates. They also answer questions from viewers. The hosts share their personal trades and strategies, such as buying debit spreads in MARA and SNOW, and a diagonal spread in AMD. They also discuss the potential for future events, such as attending live events and ramping up their Reddit presence. The transcript ends with a discussion on legging out of broken-wing butterflies and trading in pot stocks. Overall, the hosts provide insights into their trading strategies and engage with viewers in a live video setting.
/jlne.ws/49EPA0A
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| | | | John Lothian News (JLN) is the news division of John J. Lothian & Company, Inc. (JJLCO). The online media and financial services firm is staffed by derivatives industry, journalism and technology professionals. | | | | | | | John Lothian News Editorial Staff: | | | John Lothian
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| | | Jeff Bergstrom
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